Corporate governance rules are designed to ensure that firms are well run – that management decisions do not unjustly deprive certain stakeholder groups of value, for example. A major challenge for policymakers, however, as regular reports of poorly run companies in the media show, is devising effective governance provisions. Now though, using a novel approach, academics Boris Nikolov, Erwan Morellec, and Norman Schürhoff have devised a framework which can be used to gauge the actual impact on a firm’s value of some common governance problems and the relative impact on different stakeholder groups.

Deciding optimal supply chain lead times involves calculating a number of difficult tradeoffs. New research makes that calculation a lot easier, allowing firms to gain a more precise understanding of the true value of time in the manufacturing supply chain.